- ITV revealed its pre-tax profits plummeted by 61% to £193m last year
- The company’s revenue from traditional ‘linear’ advertising fell by 15%
ITV’s profits more than halved last year due to a challenging advertising market and investment in its streaming service, ITVX
The broadcaster revealed its pre-tax profits plummeted by 61 per cent to £193million in 2023 as companies became increasingly cautious about spending money on television adverts amid difficult economic conditions.
Revenue from traditional ‘linear’ advertising fell by 15 per cent, with trading towards the end of 2023 also impacted by strong comparatives from the previous year’s FIFA World Cup.
Star programme: ITV Studios produced the hit miniseries Mr Bates vs The Post Office, starring Toby Jones (pictured) as campaigner and former subpostmaster Alan Bates
However, digital sales jumped by 19 per cent to £490million following a surge in people using ITVX, which launched in December 2022.
ITV said the service’s total monthly active users grew by almost 20 per cent to 12.5 million in its first full calendar year while streaming hours climbed by more than a quarter to 1.5 billion hours.
Yet the firm’s significant investment in ITVX, including original programming, contributed to its overall profits slumping.
The earnings slump overshadowed a bumper performance by the company’s television production arm, which achieved record revenues and profits on the back of multiple new hit releases.
These included Mr Bates vs The Post Office, a miniseries credited for reigniting interest in a national scandal involving over 900 sub-postmasters being wrongly prosecuted for fraud, theft and false accounting.
ITV also made Fool Me Once, now one of the ten most-watched English-language dramas on Netflix, and the reality competition show Squid Game: The Challenge, based on the dystopian South Korean series.
The FTSE 100 firm said its studios division was on course to boost organic revenues by 5 per cent annually from 2021 to 2026.
But it warned that trading this year would be impacted by the recent US film and television industry strikes and lower demand from free-to-air broadcasters in Europe, who are delaying spending until the advertising market recovers.
Carolyn McCall, chief executive of ITV, remarked: ‘2023 has been the year of peak investment for streaming and the successful execution of our strategy and the efficiencies delivered to date have made ITV more robust.
‘ITV has a leading, scaled, global studios business, a high-growth streaming service and a cash-generative linear advertising business.
‘This ensures that we are well placed to grow profits from here as we continue to drive material efficiencies, invest behind our strategic priorities and deliver returns to shareholders.’
Last week, ITV announced net proceeds from the £255million sale of its BritBox International stake to BBC Studios would go towards financing a share buyback.
It said the transaction reflected a strategy of focusing on ‘supercharging’ ITVX and growing its television production operations.
Russ Mould, investment director at AJ Bell, said: ‘ITV’s recent decision to exit its BritBox International joint venture with the BBC looks an increasingly smart call given how well its ITVX streaming service is performing.
‘There’s no point in the company diluting its resources and focus when it needs to put all of its efforts into making ITVX a success.’
ITV shares were 5.5 per cent up at 64.3p on Thursday morning, although they have still declined by around 26 per cent in the past 12 months.
